Full text of "Report of the President, 1988-1989"

See other formats

REPORT OF
THE PRESIDENT

RICE UNIVERSITY
1989

Digitized by the Internet Archive

in 2011 with funding from

LYRASIS Members and Sloan Foundation

http://www.archive.org/details/reportofpres19881989rice

GEORGE RUPP

PRESIDENT

In this annual report for 1988-89,
I am pleased to present profiles of
colleagues who are providing leader-
ship for all of us in the larger Rice
community. Each is the dean of one
of our schools or a related area of re-
sponsibility. I am proud of each of
them individually and of all of them
working together as a team.

Like the rest of us at Rice, our
deans affirm the special identity of
this university: an institution of the
highest quality, deliberately small in
scale and focused on undergraduate
education, yet also a center for re-
search and scholarship. All of us
know full well that this identity not
only affords great opportunities but
also establishes definite constraints.
We must not imitate other larger and
more differentiated institutions. We
cannot attempt to do everything, or
we will do nothing well. Yet we also
cannot settle back and do only what
is easily within our reach. Instead,
we must stretch our collective selves
to be all that Rice has aimed to be-
come from the beginning.

In reading their own words and
the words about them, I hope we
will all sense the intelligence, the
imagination, and the energy that our
deans embody individually and col-
lectively. They have a profound con-
viction about the greatness of this

university and a vigorous commit-
ment to developing that greatness
still further. Their ambitions will
not be fully realized easily or soon —
and will surely not be realized at all
without participation from all of us.
Accordingly, I invite each of us to be
caught up in their vitality so that we,
too, may contribute to the continuing
distinction of this institution.

George Rupp

RICHARD N. STABELL

DEAN OF ADMISSION
AND RECORDS

When a university continues to at-
tract the very best students year after
year as Rice does, what can be done
to improve its admissions proce-
dures?

That's the dilemma Richard N.
Stabell, dean of Admission and Rec-
ords at Rice, finds himself and his
program in. It is a comfortable di-
lemma that makes Stabell feel un-
comfortable.

But he does not believe in taking
chances. Unlike many admissions
deans and directors at the nation's
best universities, Stabell read at least
2,500 of the more than 5,000 pro-
spective student applications that
came into Rice last year. Most of his
colleagues hire outside readers for
the task. But not Stabell.

He, his staff, faculty, student, and
alumni volunteers meticulously
search for the right students for Rice.
Thus far, their success is legend on
the Rice campus and the envy of
most every major national university.
"It's a team effort," he says. "Much
of the success of the admissions
program at Rice is due to this effort."

And, of course, he attributes much
of the success to the reputation of the
university and its tuition and finan-
cial aid program. "The financial
condition of the university, with its
competitive tuition and attractive
scholarship program, enables us to do
some things that many other univer-
sities would have trouble doing," he
explains. Its reputation as a univer-
sity of the first order and its emerg-
ing image have also helped to attract
students, according to Stabell.

"We're not going to put our heads
in the sand, however," he says.
"We're going to find the best class
each year that we can find."

The luxury of putting together
such a class was not always the case
at Rice, as it is today. Until 1965,
Rice, of course, charged no tuition.
During those years, it was not diffi-
cult to put together a gifted class of
students. "But from 1965 to 1972,
the numbers and quality as measured
by SAT scores dropped," Stabell
points out. "We selected our class

from 1,600 applicants."

Rice's problem is that it used the
same strategy it used during the times
of no tuition, according to Stabell. It
was time for a return to basic admis-
sion procedures, and Stabell saw the
handwriting on the wall. "We just
went out and said, 'We're interested
in you,' " he says. Stabell also
streamlined the application process
by combining the early decision and
regular applications. "They just
check a box now."

Stabell also worked at mobilizing
volunteers, involving more people
from the Rice community in the
process. "Alumni volunteers host
receptions and attend high school
nights in their communities," he says.

"Current students also give us
tremendous help. They host prospec-
tive students who come to visit, put
on special events, visit high schools,
write letters, and make phone calls."

All in all, the result is that over the
last five years, applications grew
from 2,900 to 5,200.

The significant challenge for the
1990s is to continue attracting the
nation's most talented students. "We
are faced with changing demograph-
ics and financial demands, but the fu-
ture's very bright for Rice," Stabell
says.

Among the major research univer-
sities. Rice will remain competitive
for good students because it offers
reasonable tuition and because of its
reputation for exceptional under-
graduate education, according to
Stabell.

One concern, however, stands out
above all others. "We are striving for
diversity in our classes," he points
out. "This is an ongoing challenge
that every university must deal with."
Projections show, he says, that by the

year 2000, Texas will be heavily
Hispanic. "We need to attract more
qualified minorities to Rice."

Part of his strategy for dealing
with this issue is to "get out there and
let our presence be known in Hous-
ton." After all, he says, "Rice is not
an island but an integral part of the
community."

SARAH A. BURNETT

DEAN OF STUDENTS

Psychologist Sarah Burnett laughs
easily and heartily with a trace of a
Tennessee accent as she relates a
student's response to her appointment
as dean of students: "Oh, she's too
nice for that job!"

An outgrowth of the position of
proctor, which dealt primarily with
student discipline, the re-created dean
of students' role includes interaction
with students in many other areas. In
addition to enforcing penalties on
alcohol policy violations, disorderly
conduct and the like, in her new role,
Burnett oversees the Office of Stu-
dent Activities, the Office of Student
Health Education, the Counseling and
Psychiatric Service, the Student
Health Service, and the activities of
the Rice Memorial Center. "The hope
is that by having positive interactions
with students in other ways, they
won't think of the dean of students as
just the ogre," she says.

As one of two women deans at
Rice, Burnett says she is "glad
I'm not the only one." But that
position is not particularly extraordi-
nary for her. She was in the minority
as a woman graduate student in psy-
chology at Tulane University (where
she earned M.A. and Ph.D. degrees in
experimental psychology); she was
one of the first women hired in the
psychology department at Rice and
the first woman to get tenure in the
School of Social Sciences. "It's
something women my age are used
to," she says.

Although the word "feminist" was
not in her vocabulary during her high
school years, Burnett says she was
brought up to believe women should
set high goals for themselves. Now a
self-described feminist, she is deeply
concerned about opportunities for
women and women's rights. "Some
of the brightest women in the nation
go to school here," she says. "I want
them to believe they can achieve
something very significant in this
world. It pains me to see really tal-
ented women (and minorities, too)
underestimate themselves." In her
new position, Burnett feels "obligated
to be sensitive to the needs of women
on campus and to represent those is-

sues whenever and wherever I can."
She always hoped she'd see "equality
by the year 2000" but now knows it
won't happen that soon. But Burnett
hopes to see a 50/50 male/female
undergraduate population at Rice in
the near future. (It's exactly 60/40
now but was about 75/25 when she
arrived at Rice in 1972.) "It could be
done without any loss in the caliber
of students," she contends.

Although she started out studying
chemistry in the post-Sputnik period,
Burnett knew she was hooked on
psychology when she realized she
was reading about it for pleasure
during her off-time. She says she's
always been interested in what moti-
vates people. She took her Ph.D. in
the area of learning and memory and
has done research on intelligence and
cognitive processes.

"I think a social science back-
ground is often an advantage for
student affairs work," she says. She
finds her professional background
helpful in dealing with such issues as
sexual harassment, date rape, sub-
stance use and abuse, parental con-
cerns, and the stress and health ef-
fects that come from living under a
lot of pressure. Her knowledge of
statistics and evaluation will also
come in handy since many of the
programs under her jurisdiction really
need to be evaluated regularly for
their effectiveness.

"What we in student affairs try to
do is to be aware of the possibilities
for student growth in both the aca-
demic and non-academic realms and
to do what we can to foster that de-
velopment," she says. "We believe
the experience gained by being the
president of an organization or work-
ing on the Thresher, for example, is a
valuable one. The trick is to help
make it more valuable educationally
by offering leadership seminars or
training in peer counseling or a jour-
nalism class for the Thresher staff
while encouraging the students to run
their own show."

Burnett says her biggest challenge
will be to try to find ways to improve
all the student services within the
budget constraints. She is concerned
with finding a place for students to
gather from 3:30 p.m. (when
Sammy's Cafeteria closes) to mid-

night. In the short-term, Burnett
would like to see the addition of a
coffeehouse, serving non-alcoholic
beverages as an alternative to Willy's
Pub. Her ultimate dream is to have an
all-encompassing "event" center for
theater, films, and concerts, with an
outdoor swimming pool, bowling
alleys, and restaurant. But she knows
she cannot "change everything in a
day."

As a member of the admission
committee for the last several years,
Burnett has noticed some changes in
the students who matriculate at Rice.
The entering class of 1989 is the best
class she has ever seen: strong aca-
demically as always, but more active
in organizations and more interested
in the community around them. "Rice
has always had students who were
outstanding as leaders or very active
in community service. This year it
seems the whole class is like that,"
she says.

"The majority of students at Rice
are fun to interact with," Burnett
says. "They're clever and funny and
highly motivated." Although she
hopes that the disciplinary actions do
not overshadow the other part of her
job, it brings her satisfaction just to
know that "what I'm doing is impor-
tant. It makes a difference."

MICHAEL M. CARROLL

DEAN OF THE GEORGE R. BROWN

SCHOOL OF ENGINEERING

Dean of Engineering Michael M.
Carroll is a master crossword puzzle
creator — his cryptic brain-teasers
have appeared in such bastions of
puzzledom as the New York Times.
(Clue: Equip the old professor for
final battle. Answer: Armageddon —
arm/aged/don.)

Carroll's penchant for finding
answers to complex, often puzzling
questions will come in handy over
the next few years as he and his engi-
neering colleagues grapple with the
challenges they face within the
School of Engineering.

The native of Thurles, Ireland,
arrived at Rice in fall 1988 from the
University of California at Berkeley,
where he had been on the mechanical
engineering faculty since 1965, the
last five years as Shell Distinguished
Professor and, since 1986, associate
dean for interdisciplinary studies. His
professional accomplishments earned
him election to the National Acad-
emy of Engineering in 1987.

Carroll's first year as dean at Rice
was spent "learning how to be a
dean," he says. New faculty mem-
bers — eight this year — have been
hired, most of them to replace those
who had left or retired, and the more
pressing space requirements for the
school have been met.

Financial questions have been
dealt with as well. On the one hand,
the expenditure of sponsored research
funds in the School of Engineering is
up to $10 million in 1988-89; the
1983-84 figure was about $4 million.
On the other hand, the cost of labora-
tory equipment for the school's
undergraduate instruction program
continues to grow, and, like other
university divisions, they are seeking
ways to supplement their budget.

And perhaps more than any other
university division, the School of En-
gineering is finding the question of
market value affecting faculty re-
cruitment. "The philosophical ques-
tion is — should a professor of engi-
neering be paid more than a professor
of physics or a professor of English
or history?" Carroll asks. "Person-
ally, I'm not sure that the correct an-
swer is 'yes ,'but the national answer
is 'yes.' The answer at Rice tends to
be 'no ,'and that makes it difficult to
keep the troops happy, to compete

successfully with other institutions,
and to protect the good faculty that
we have."

What all of this means for Carroll
is that he and his colleagues in engi-
neering will become more involved
in fund-raising efforts for their school
in the coming years. That activity
will add another piece to the puzzle
Carroll is already pondering, ele-
ments of which he describes in terms
of "balances and tensions."

One such question of balance, he
says, is making sure program growth
in engineering is uniform. "We have
been focusing on our strong areas, so
it's no coincidence that some of our
departments have grown and im-
proved tremendously over the last
few years," he says, citing computer
science, mathematical sciences, elec-
trical and computer engineering, and
the biological aspects of chemical
engineering as examples. "But at the
same time, other areas have become
weaker. I think mechanical and civil
engineering both lost ground, as well
as the more traditional areas of
chemical engineering."

Carroll believes he has found a
solution to this particular puzzle,
however — the creation of a new
interdisciplinary research center. Ini-
tial faculty meetings have taken place
to discuss the formation of an Energy
and Environmental Studies Institute,
and early reactions are positive.

While a prospectus for the insti-
tute must still be written and ap-
proved, Carroll hopes it will be op-
erational within the next year.

Other questions of balance Carroll
faces could prove more difficult to
answer.

The first is striking the right bal-
ance between teaching and research.
"On the one hand, the idea of the
teacher-scholar is a very important
one," Carroll says. "The idea that you
won't attract top-quality faculty to
teach the undergraduate courses un-
less you also have a top-quality pro-
gram of graduate instruction and re-
search is valid. But there's also the
fact that one can only stretch so far."

Another challenge for Carroll is
how to balance the engineering cur-
riculum between technical and non-
technical subjects. "We certainly
want to graduate well-rounded

people, not just technocrats, and yet
it's a struggle to do this within the
confines of a four-year degree pro-
gram," he says. "We'd like our stu-
dents to have a good grounding in the
humanities, in the relationship of
technology to society, in professional
ethics, in technical communication.
Yet it is difficult to balance those
with the technical content mandated
by the Accreditation Board for Engi-
neering and Technology (ABET)."

Carroll has appointed a committee
that will, in the coming months, be
taking a hard look at the engineering
curriculum to make recommendations
for answering that question.

Finally, he cites the problem of
balancing theory and practice within
engineering. "One definition of engi-
neering is 'the application of basic
scientific principles to real-world
problems.' But that's too simplistic,"
Carroll says. "Some people like to
work just on the basic principles
rather than the real-world applica-
tions, and Rice traditionally has
leaned more to the theoretical side."

Carroll believes a solution could
lie with the interdisciplinary institutes
in which the School of Engineering is
involved — the Computer and Infor-
mation Technology Institute (CITI),
the Rice Quantum Institute (RQI),
and the Center for Biosciences and
Bioengineering, already in place, and
the proposed Energy and Environ-
mental Studies Institute.

Puzzling challenges and creative
solutions are something Carroll en-
joys, so it comes as no surprise when
he says he has had more fun than ex-
pected in his first year as dean — even
as he does his own personal balanc-
ing act between being a dean, main-
taining a research program on the
response of porous media, facing the
challenges of fund raising, and, he
hopes, teaching a class.

Nor is it a surprise to hear his opti-
mism over the future of the School of
Engineering. "Looking back at the
last few years, I see tremendous prog-
ress in the university as a whole and
within the School of Engineering," he
says. "I see no reason why we can't
continue that."

ALLEN J. MATUSOW

DEAN OF THE

SCHOOL OF HUMANITIES

?"'■•

Y^-, T ~r'

v vM

1 . - §3

■ •&:■:

-"-'

... im>

"The image of Rice as primarily a
science and engineering school had a
certain appropriateness when I got
here," says Dean of Humanities Allen
J. Matusow, who joined the univer-
sity in the fall of 1963 after receiving
his Ph.D. from Harvard University.
"Quite a lot has happened since then.
Rice today is a balanced university
with programs as strong in the hu-
manities as in the sciences." The hu-
manities division now includes more
than 100 professors, graduates one-
quarter of the student body, and
boasts a number of scholars with
national and even international repu-
tations.

"Not long ago Rice was a waste-
land in the area of the arts," Matusow
recalls. "Along with the humanities,
the arts have also arrived and indeed
now flourish here. Thanks to the
Shepherd School , we have live con-
certs of high quality on campus every
week. We have a dance company,
over-subscribed courses in the studio
arts, theater openings on the average
of one every two weeks, two art
galleries and a Media Center that
offers courses in film-making and
photography, and a film series featur-
ing classics and underground films.
The programs we have developed in
the humanities and in the arts have
helped to establish Rice's reputation
as one of the most attractive universi-
ties in the country."

Matusow says that when he be-
came dean in 1981, he had two cur-
ricular goals: to present Western civi-
lization as more than disjointed frag-
ments and to end the insularity of the
curriculum by bringing to the faculty
scholars of non-Western cultures.
With the introduction of a new uni-
versity curriculum in 1988, science
andengineering students are required
to take a two-semester course on
representative Western texts, a
course, in Matusow's view, that goes
a long way toward achieving one of
his hopes.

The William Gaines Twyman Pro-
fessor of History, Matusow remem-
bers that as late as the 1960s his de-
partment offered courses only on
America and Western Europe. "To-
day," he says with some pride, "we

are a world history department, offer-
ing courses on China, Latin America,
Africa, Islam, Judaic Studies, and the
Caribbean, as well as courses in U.S.
and European history." Rice has also
built a program in Asian Studies and
currently offers language instruction
in Chinese, Japanese, Korean, and
Sanskrit. "Global interdependence
has become a fact of life," Matusow
says. "The Rice curriculum has re-
sponded to this challenge, which I
regard as a moral challenge. The
result is that we have become a more
interesting place in which to study
and to teach."

Another of Matusow's goals as
dean has been to promote interdisci-
plinary discourse and recognize new
currents of academic thought. He
credits the Center for Cultural Stud-
ies, part of President George Rupp's
enhancement plan, with encouraging
these developments. "The Center," he
says, "has fostered cross-cultural
conversation and sponsored work-
shops in feminist theory, critical
theory, and post-colonial discourse."
Matusow is quick to add that tradi-
tional disciplines have not lost their
centrality at Rice and that the center
also sponsors workshops in the an-
cient Mediterranean world and me-
dieval studies. "Our professors talk to
each other, learn from each other,
provide a critical audience for each
other's work. The hermit-scholar,
once so typical of the humanities, is
not typical at Rice. Time and again,
new faculty remark on the intellectual
excitement they find on this campus."

A native of Philadelphia and the
son of a lawyer, Matusow briefly
considered studying criminal law, but
his love of history won out. During
more than 25 years of teaching, Ma-
tusow has been recognized numerous
times by receipt of the Brown awards
for superior and excellent teaching
and is the recipient of the Brown
Honorary Life Teaching Award. He
received the Piper Professorship
Award in 1980. Author of Farm
Policies and Politics in the Truman
Years and the nationally reviewed
The Unraveling of America: A His-
tory of Liberalism in the 1960s, Ma-
tusow is currently working on a book
about the Nixon presidency.

Looking to the future, Matusow

says the chief challenge will be to
recruit and retain first-rate humanities
faculty. "The market for professors
has changed," he says. A decade ago,
academic jobs were so scarce that
Rice received a grant from the Mel-
lon Foundation to create temporary
appointments for younger humanists
who had none. Now the top candi-
dates for tenure-track jobs sometimes
receive four or five offers. To attract
the best and keep the outstanding
people we already have, Matusow
says, "we must remain committed to
making Rice a special place where
creative people can find intellectual
excitement and strong institutional
support. As good as we are, we must
get better."

JAMES R. POMERANTZ

DEAN OF THE

SCHOOL OF SOCIAL SCIENCES

The future is close at hand for Dean
of Social Sciences James R. Pomer-
antz. Joining Rice for the fall 1988
term, he arrived in Houston just in
time for Hurricane Gilbert. Events of
the first Pomerantz year at Rice
seemed to take their cue from this en-
trance, coming on with gale force.

"My first task was to help the new
Center for the Study of Institutions
and Values, which began its first year
of operation in 1988 as part of the
enhancement program," Pomerantz
noted. One of the five centers and
institutes on campus formed for
interdisciplinary research, the Center
for the Study of Institutions and
Values aims at bringing together his-
torians, psychologists, sociologists,
economists, and anthropologists to
look at the events and trends shaping
our lives.

Together with center director
Peter Mieszkowski, Rice professor of
economics, Pomerantz set in motion
a series of plans for CSIV: a major
AIDS project to assess the impact of
Acquired Immune Deficiency Syn-
drome on Houston; multimillion-
dollar grant applications for research;
a publishing program; and a series of
seminars with the wider Rice faculty
on the often-opposed subjects of
"Rationality and Altruism."

This year, those plans are bearing
fruit. The initial planning stage of the
five-year Houston AIDS study is
beginning to bring economists and
sociologists together to look at the
policy issues surrounding the AIDS
epidemic, formulating the questions
to be asked, the surveys to be taken
and the methods of impact assess-
ment.

The seminar series on "Rationality
and Altruism," which will go on
year-long, will ask Rice philosophers
and anthropologists to look at ques-
tions of personal value from a mul-
tidisciplinary point of view, engaging
scientists as well. "A book is planned
to come out of the series, with a
chapter by each participating disci-
pline," Pomerantz explains. "This
kind of integration of efforts will be a
major contribution to the field, to

expand the world's knowledge of the
subject and provide a published fo-
rum for our Rice faculty."

The near future will also bring two
major social sciences conferences to
the university. A national conference
on the 25th anniversary of the Voting
Rights Act of 1965 coordinated by
sociology professor Chandler
Davidson will look at the results of
that legislation. A conference on the
U.S. Senate planned by Joseph Coo-
per, professor of political science and
former dean, will bring to the campus
a gathering of leading historians, po-
litical scientists, and journalists.

And, along the way, the university
appointed Texas Lt. Governor Bill
Hobby as Tsanoff Professor of Public
Affairs beginning with the Spring
1990 semester.

Somehow in this first year of
deanship, Pomerantz found time to
chair a major conference in his own
field, cognitive psychology. Held at
Yale in May 1989, the conference
will produce a major volume edited
by Pomerantz titled The Perception
of Structure, to be published in 1990
by the American Psychological Asso-
ciation.

As an internationally respected
expert on cognitive psychology and
human vision, Pomerantz is also an
active editor — he produced a leading
volume in his discipline, Perceptual
Organization (1981) — and writer of
journal articles and reviews. Coming
to Rice from the chairmanship of the
psychology department at the State
University of New York (SUNY) at
Buffalo, Pomerantz clearly enjoys the
challenges of a dean's duties.

"Social sciences is a small school
with six small departments, so it
makes sense for us to launch as many
interdisciplinary programs as pos-
sible," he reflects. "I believe our
initial success with bringing differing
disciplines together in the centers and
institutes will extend the idea of col-
legiality and produce more major
research."

The near future will also see Jim
Pomerantz polishing up his small,
gem-like departments by actively
recruiting to fill six faculty slots —

primarily in replacement positions —
and encouraging his faculty to pub-
lish the results of the projects
launched by the enhancement pro-
gram. This lapidary quality to social
sciences at Rice promises to take on
a bright shine. Already, he notes,
one-third of his faculty have pro-
duced important volumes in their
fields, and more are on the way.

JAMES L. KINSEY

DEAN OF THE WIESS SCHOOL

OF NATURAL SCIENCES

'AJ-. '-/^I^I

In a comer office of the Space Sci-
ence building, an "Eye of the Storm"
works its magic. Electric blue bolts of
"lightning" blaze in rapid frenzy from
the base of a clear glass dome, hint-
ing at the wonders of science and the
power of nature.

Found anywhere else, the "Eye" is
a high-tech toy, the 1980s equivalent
of a lava lamp.

Found here, in the office of Dean
of Natural Sciences James Kinsey,
the blue bolts of electricity signal the
energy of a school in motion.

It is a motion that has picked up
steam since Kinsey, a Rice graduate
himself, left the chemistry depart-
ment at the Massachusetts Institute of
Technology 1 8 months ago in order
to take the deanship at Rice. And it is
a motion that promises further accel-
eration in the next few years.

If there has been a point of orien-
tation at Rice University in recent
years, it has been "interdisciplinary"
or "multidisciplinary" — a focus on
areas of interest that cut across tradi-
tional academic boundaries.

Indicative of this rethinking of
disciplines are the changes taking
place in the biological sciences,
which have received a large share of
Kinsey's attention over the last year
and a half.

First came a reorganization within
the school itself, which has yielded
two new departments that focus on
what Kinsey calls "the two sides of
the biological sciences." The Depart-
ment of Ecology and Evolutionary
Biology focuses on the biology of
whole animals, population genetics,
and ecosystems, while the Depart-
ment of Biochemistry and Cell Biol-
ogy concentrates on biology at the
molecular and cellular levels.

Next came a reorganization of the
undergraduate curriculum, providing
students in the biological sciences a
common foundation of knowledge
before they choose which "side" of
the biological sciences they are most
interested in.

As lines of common interest are
explored within the biological sci-
ences themselves, faculty members
are also working with scientists in
other schools to further progress in
such areas as biomedical research.
The completion in late 1990 of a new

biosciences and bioengineering build-
ing, George R. Brown Hall, will help
solidify this work and will enable
Kinsey and his colleagues to begin
the planned faculty expansion.

Parts of the Department of Bio-
chemistry and Cell Biology will
move into the new, 107,000-square-
foot facility when it is completed,
along with the organic chemistry fac-
ulty from the chemistry department
and biomedical researchers from the
School of Engineering.

With building construction begun,
Kinsey can now better focus on the
goals for the School of Natural Sci-
ences: recruiting the best new faculty,
graduate students, and undergradu-
ates possible. Pursuing these goals
will bring Kinsey and his colleagues
face-to-face with what he sees as the
greatest challenges to the school's
future: funding — for research, for
competitive salaries, for graduate stu-
dent tuition and stipends, and for pro-
grams that will attract the best avail-
able undergraduates to Rice.

While the new building will help
attract new faculty to the university,
Kinsey admits that he will probably
be looking toward developing a
young faculty rather than recruiting
people at the senior-faculty level,
where competing for the limited
number of available candidates
means "salary-wars" with other uni-
versities. "But developing a young
faculty is something Rice has shown
itself to be good at," Kinsey says.

In order to support top young fac-
ulty members and graduate students.
Rice must — along with other univer-
sities throughout the country — con-
tend with what has become a steady
decline in federal funding both for
research and graduate student sti-
pends.

The research funding outlook is
both good and bad. "Rice is improv-
ing its competitiveness with other
institutions for federal funds — we're
steadily getting a larger piece of the
pie," Kinsey says. "Having said that,
I would remark that the pie is getting
smaller. I'm quite worried about the
prospects of future support."

While industry cannot be expected
to make up the shortfall, Kinsey
hopes the development of interdisci-
plinary research centers at Rice, such

as the Institute of Biosciences and
Bioengineering and the Rice Quan-
tum Institute, will allow some of the
support-raising to be done collec-
tively rather than individually — a
move that could help to better attract
what federal research dollars there
are.

Declines in federal funding also
pose a problem in recruiting and re-
taining top graduate students. "At any
given time, a faculty member is look-
ing at secure funding for, at best, the
next 12 months," Kinsey says. "And
yet we take on students whose studies
will last four years — perhaps five or
more. I think the faculty and the insti-
tution feel a very strong moral obli-
gation for those students to be able to
continue their studies to completion."

Finding the best undergraduate
students — particularly with an eye
toward recruiting minorities and
women — will require imagination
and vision. "The number of young
Americans choosing to study science
and engineering is on a decline both
at the undergraduate and graduate
level," Kinsey notes. "And if you
look at the 'shortage' of people going
into science and engineering across
the country, it is a shortage that
would disappear if we recruited the
same proportion of women and mi-
norities as we do white male stu-
dents."

To reach those groups, the school
is participating in a number of out-
reach programs geared to high
schools (and, on the graduate level,
other universities) with large minor-
ity populations. Kinsey and his col-
leagues are also discussing ways to
make early contact with Rice under-
graduates who have expressed initial
interest in the natural sciences in or-
der to bolster that interest.

Despite the financial challenges he
sees in the future, Kinsey remains
enthusiastic, not only about changes
going on in the natural sciences but
about Rice and the continuity of tra-
ditions he saw here as an undergradu-
ate in the 1950s — traditions with an
interdisciplinary touch. "There is still
that sense of a small, intimate institu-
tion in which people tend to know
one another, with many connections
and friendships that reach across tra-
ditional lines," he says. .,,-

PAULA. KENNON
DEAN OF THE SCHOOL
OF ARCHITECTURE

In Memoriam

Rice University School of Architec-
ture Dean Paul A. Kennon, FAIA,
died suddenly on January 8, 1990,
at age 55. "Paul Kennon s death is
a great loss, both to the field of
architecture and to Rice Univer-
sity," said Rice President George
Rupp. "In his brief time as our dean
of architecture , Paul has won the
admiration, respect, and affection
of all of us. His engaging personal
presence and his vigorous leader-
ship of the School of Architecture
will be sorely missed."

The following article expresses
Dean Paul Kennon s hopes and
dreams for the School of Architec-
ture.

Paul Kennon, a leading American
architect, believes he has come back
to Rice as dean of the School of
Architecture just at the right time to
plan for the future.

His ambitions for the school are
just as tall and commanding as the
major buildings he has designed
from coast-to-coast. Kennon 's phi-
losophy — if a veritable fountain of
enthusiasm and drive can be
summed up — is nothing less than
"to kindle the passions of the
young, brightest minds and talent
we can find." And, in doing so,
Kennon plans to move Rice into
what he terms "a pre-eminent posi-
tion" among architecture schools in
the nation.

Kennon 's knowledge of the Rice
school and its history surpasses
many of those he now leads. As a
protege of the late Eero Saarinen,
Kennon graduated with a master of
architecture degree from Cranbrook
Academy of Arts to work with
Saarinen as senior designer. In
1964, he became associate professor
of architecture at Rice, spending
much of his first two years in Chile
as a visiting professor at the Univer-
sidad de Chile. In 1966, he became
associate director of the Rice
school, teaming up with director

William Caudill, whose firm Kennon
joined (which later became CRSS).

Although going back to private
practice as principal designer and
president of his firm, Kennon always
kept close ties to Rice. Tapped to
become dean of architecture begin-
ning with the fall 1989 term, Kennon
laid out his design plan for the future:
major enhancement of curriculum,
faculty, preceptorship programs, and
an adventurous publishing program.

"Our purpose is to create an excit-
ing education and immerse our stu-
dents in it," he says. "We have great
strengths in design and practice al-
ready in place. Our task is to enhance
and expand these strengths. Our task
is to teach the culture of architecture
as history, to ignite the passions of
the young as part of the studio proc-
ess, and bring in the widest diversity
of ideas along the cutting edge of
theory and design."

While planning for his first year as
dean, Kennon recruited Alan Balfour,
Scottish-born and Princeton-educated
scholar noted as one of the leading
international architecture educators,
to fill the school's other senior ad-
ministrative position, which had de-
liberately been kept vacant. Balfour
developed the graduate program in
architecture for the Georgia Institute
of Technology and previously
planned and instituted a new graduate
degree program at Massachusetts
Institute of Technology. Now, Ken-
non has asked Balfour to study the
Rice curriculum and similarly en-
hance the graduate program as his
associate dean.

"One of the first things recom-
mended to me was to get in touch
closely with the students," Kennon
says. Thus, the new dean and holder
of the Harry K. and Albert K. Smith
Chair of Architecture rolled up his
sleeves and took on the teaching of a
design studio. Architecture students
(Rice now has 100 undergraduates
and some 100 graduate students)
have the opportunity to learn from
the architect who most recently de-
signed Lee Iacocca's Chrysler Center
and an innovative housing project in
Tokyo.

Kennon 's plans for enhancing the
School of Architecture include work-
ing toward establishing six chairs,

doubling the present three. He hopes
to build a mix of young emerging
faculty with older, distinguished fac-
ulty, sparked by visiting critics with
some of the most challenging ideas in
architecture today.

"I'd like to activate the alumni of
the School of Architecture and get
them involved in our programs," he
muses. One of those is publication of
Rice projects and papers.

"We have one of the most impor-
tant preceptorship programs in archi-
tecture today run by this school,"
Kennon says. "Each student here has
the opportunity to work for a year in
the studios of leading architects
around the world. Why don't we get
the students to publish the results of
their year of preceptorship while
they're still fresh from the experi-
ence?"

Kennon notes that he plans to
expand the preceptorship to Japan
and the Far East (as well as Europe)
and is working on an exchange with
architects in Moscow.

The future also holds new interdis-
ciplinary programs for the School of
Architecture. "I want to challenge our
students with faculty from the hu-
manities, from engineering, and from
the business school," Kennon says.
"That is emerging as one of the great
strengths of Rice and is one of the
most important directions in which
we must grow. At Rice, we live in a
world of two cultures: humanities
and the arts in one, and science and
mathematics in the other. Architec-
ture can become the interface be-
tween the two."

MICHAEL P. HAMMOND
DEAN OF THE SHEPHERD
SCHOOL OF MUSIC

Michael Hammond, dean of the
Shepherd School of Music, is con-
cerned about Rice music students.

By the time they reach the univer-
sity, their parents have already in-
vested a substantial sum of money in
their music instruction, most of
which is private and unavailable
within the normal public school cur-
riculum. Students with other aca-
demic specialties have generally not
had to pay individually for their labs,
instruction, or special equipment,
whereas the kind of pre-college sup-
port a young musician needs is often
extensive and expensive.

Many of the music students' par-
ents feel they have carried this addi-
tional burden long enough — that it is
now appropriate for the young per-
formers' abilities and achievements
to be recognized through scholar-
ships. Many colleges and universities
agree and provide merit awards to
attract gifted musicians.

Hammond sees Shepherd School
students practicing four or more
hours a day, attending classes, doing
assignments, and performing fre-
quently. On top of this invigorating,
but heavy, workload, many of them
hold down part-time jobs such as
waiting on tables to pay their bills.
"Think about it: making payments on
their instrument, covering insurance
costs and repairs can easily run more
than $ 1 ,000 per year, especially if a
major repair is needed," he says.

Sometimes Hammond hears
people say that outside work is good
for his students' characters. "How
can exhaustion and distraction be
good for character?" he asks.
"They're already working extremely
hard just carrying the heavy academic
load here plus practicing and per-
forming. We need to give them time
and require complete focus of their
energies."

Hammond's challenge for the
1990s, then, is to build an endowed
scholarship fund for these talented
performers so they have time to fine-
tune their craft. "We would like to
offer full scholarships for all quali-
fied music students; that would be the
ideal. It is already done at the great
Curtis Institute in Philadelphia, and,
closer to home, Baylor is moving in
that direction, too."

There is little doubt that if anyone
can raise the kind of money needed to
endow scholarships, Michael Ham-
mond is the person to do it. His sheer
energy and vision shaped the new
music school building, Alice Pratt
Brown Hall, that is going up opposite
the student center. Ground-breaking
ceremonies took place last spring,
and Hammond foresees this building
as "the most functional and beautiful
anywhere."

"Without the building, this school
could not have been better than
'good,'" he asserts. "I knew that if we
didn't build the building, then our fac-
ulty would begin to lose heart over
time and leave."

The new building will do many
things for music instruction and per-
formance at Rice, according to Ham-
mond. But, particularly, it will help
attract "that small universe of tal-
ented musicians who are also excel-
lent students."

"As they learn more about the
building, the faculty, and the pro-
gram, more of them will come to
Rice," he believes. Noting that in the
past some talented performers at-
tracted to the school needed academic
waivers to gain admission to Rice, he
says, "We almost never ask for ex-
ceptions for our students any more."

So the kinds of students Ham-
mond and his faculty are after want to
come to a fine university — not just an
excellent music school. "Rice and the
Shepherd School of Music together
have more to offer than almost any
other school in this regard," he adds.

Hammond sees a window of op-
portunity opening.

"The Shepherd School of Music
can become one of the premier music
schools in the world," he says. "As a
matter of fact, we are no longer con-
sidered a regional school or even a
national music school. We are inter-
national, with fully 25 percent of our
graduate students coming from
abroad."

Hammond believes the building
provides a historic opportunity. "We
have to seize it or it will pass us by,"
he says. "The next stage in our devel-
opment requires that we continue to
enhance the quality of all our pro-
grams — that we attract the students
capable of handling a difficult educa-

tional program (those who have both
the energy and intellect), that we con-
tinue to attract distinguished faculty,
that we continue to flesh out our pro-
grams in composition, theory, history
and performance. All these elements
matter."

Part of the historic opportunity
Hammond mentions also touches a
basic educational issue. He and his
colleagues favor a classic music edu-
cation and believe this type of cur-
riculum is the only thing that will free
students to deal with the problems of
their own time without having to fol-
low every fashion that comes along.

Today, some voices are saying
that the future is entirely in technol-
ogy, that we ought to stop teaching
Bach, Mozart, and Brahms, harmony,
ear-training, and counterpoint. "Our
challenge is rather to incorporate the
new while giving our students a solid
foundation in the past," Hammond
explains.

"You can buy an electronic instru-
ment that makes sounds like a vio-
lin," he says. "But where do you go
from there? You can connect this
synthesizer through a midi to a com-
puter, but where is the informed ear
and imagination that will decide what
is worth doing with this equipment?

"Electronic instruments are full of
potential only for someone who hears
very well and who can look at these
instruments and ask, 'Where can they
take us that we haven't been before?'
But this requires a thorough ground-
ing in the past and complete technical
control. In short, it requires the free-
dom that comes with a classic educa-
tion," Hammond points out.

"Only the uneducated follow fash-
ion for its own sake. With a firm
grounding in history, our eyes and
ears can be opened to the present and
perhaps even to hints of the future."

That's the same way he runs the
Shepherd School of Music. With vi-
sion, finesse, and persistence, Ham-
mond tries to understand what good
music instruction is, where it is
going, what his students and faculty
need, and what his school must do
now so that music at Rice and all
who attend the Shepherd School can
have a fruitful future.

BENJAMIN F. BAILAR
DEAN OF THE

JONES GRADUATE SCHOOL
OF ADMINISTRATION

Global competition. Federal restric-
tions. Environmental regulations. Un-
ion relations. Success in business can
no longer be assured with a head for
figures and good management skills.

No one knows the intricacies of
today's business world better than
Benjamin Bailar, who arrived as dean
of Rice's Jesse H. Jones Graduate
School of Administration two years
ago. Bailar brought with him first-
hand knowledge of both the public
and private sectors, having previously
served as president and CEO of Scott
Publishing Co., as executive vice
president and director of U.S. Gyp-
sum Co., and as U.S. Postmaster
General.

That experience is why Bailar is
now so pleased with the direction the
Jones School is taking — a direction
that will produce Rice MBAs with
not only the necessary skills in fi-
nance and management but also with
a solid grounding in how to deal with
the myriad of aforementioned factors
that make today's business world so
complex.

The most obvious manifestation of
that dedication to training students
for work either in the public or pri-
vate sector is one of the Jones
School's most unusual require-
ments — one-fifth of the school's core
curriculum is devoted to studying the
interrelationship among the business
community, the legal community,
and government. Understanding that
interrelationship, Bailar says, is criti-
cal for success in today's market-
place.

"Governmental and legal pro-
cesses are getting more important
each year in terms of the ability of
private corporations to function
effectively," he explains. "I am con-
vinced that business leaders of the
future must understand the public
sector." Bailar says that by "public
sector" he means not only govern-
mental and legal processes but also
such entities as labor unions, the con-
sumer movement, and the press — all
fields with which the successful busi-
ness manager must be familiar.

A Jones School faculty member
teaches the first part of the Legal and
Governmental Processes course;
four attorneys serving as adjunct fac-
ulty members teach the second part.

Though Bailar would eventually
like to secure funding for a full-time
faculty member to teach the second
part of that course, he also recognizes
the school's considerable adjunct fac-
ulty as a real asset. The 35 adjuncts
join a regular Jones School faculty
that numbers 22 (including four posi-
tions filled this fall) in teaching the
school's 185 students.

The presence of the adjunct fac-
ulty, which teaches primarily second-
year elective courses, provides Jones
School students with a vital link to
the business community and a fresh
perspective on various aspects of
management.

Their presence is just one example
of the many ways the Jones School
interacts with the local business com-
munity, taking full advantage of its
presence in one of the largest busi-
ness and economic centers in the
country, Bailar notes. The school's
Office of Executive Development
both offers courses open to area busi-
ness executives and prepares special
in-house courses commissioned by
local businesses for their own em-
ployees. The school's placement of-
fice links students with businesses
inside and outside the Houston com-
munity for summer internships and
post-graduation jobs. An extern pro-
gram sends students into area busi-
nesses for a day or two each spring
for some quick exposure to the busi-
ness environment. The Dean's Semi-
nar brings in speakers from outside
the school each year to talk to stu-
dents in the classroom environment.
And, finally, the school's flex-time
program admits 20 students each year
who are allowed to stretch their stud-
ies over a three-year period while
continuing their employment — a pro-
gram that brings business people
from the community onto the campus
as students.

Community interest in the Jones
School has taken other forms as well.
A Council of Overseers — business
leaders who visit the school twice a
year — consults with Bailar and his
colleagues about various problems
and circumstances within the school.
The Rice Accounting Council is a
similar group that deals principally
with the school's accounting pro-
grams.

And there is community financial
support. The Houston Endowment,
for example, has given $4 million
over the last two years for the
school's endowment, which has
helped in faculty expansion.

Community interest and support
are important for that expansion,
since the competition for good busi-
ness school faculty has become in-
tense. "The recruitment of faculty has
become extraordinarily difficult and
demanding," Bailar says. "But we've
had some very solid support from the
Houston business community in
terms of expressing their interest and
hopes to candidates who come to
town for interviews."

While Bailar contends with the
concerns of faculty recruitment, he
says one of the most immediate chal-
lenges facing the school is more tan-
gible. "We're in a nice new building
[Herring Hall], and there are a lot of
things that are right about the
school," he says. "But we really need
to equip our classrooms with projec-
tors and computers. We're moving
increasingly toward the situation
where students need to have their
own computers — we strongly encour-
age it today, and it may be required in
the not-too-distant future. When that
happens, we will face some pressure
in terms of financial aid."

Looking ahead, Bailar would also
like to see the Jones School begin a
doctoral program — one he describes
as "small but meaningful."

In the meantime, Bailar looks
around him and likes what he sees
about the Jones School today. The
students, most of whom are in their
late 20s and are returning to graduate
school after a brief stint in the work-
ing world, are "bright and very seri-
ous," he says. And the direction taken
by the school's programs — preparing
students to work effectively in the
public or private sector — will remain
relevant to society even if the "MBA
Decade" that began in the early '80s
begins to fade.

"What we're doing, and what we
need to continue to emphasize, is
training our students to analyze and
solve problems," Bailar says. "The
training they get here will continue to
be relevant."

MARY MCINTIRE

DEAN OF CONTINUING STUDIES

AND SPECIAL PROGRAMS

■ I

SFSlaS P. CARTEL

C&VT^H FOR GGMI'NUIWO

* I \ \

Perhaps the strongest link Rice Uni-
versity has to the community is its
Office of Continuing Studies. This
bond is being strengthened annually
by steady enrollment growth, provid-
ing clear evidence that more and
more Houston-area residents are
attracted to the intellectual atmos-
phere of Rice.

OCS has grown despite a difficult
economy. Enrollment in non-credit
courses was nearly 8,200 for the
1988-89 academic year, compared to
5,500 just three years ago — a gain of
nearly 50 percent.

A daytime visitor to the newly
named Speros P. Martel Center for
Continuing Studies might find for-
eign students in native dress while
they study English as a second lan-
guage. In the evening, corporate
executives might drop in to attend
"Conducting American Foreign Rela-
tions," or a doctor in a scrub suit
might be seen dashing from the
Texas Medical Center to catch a class
on public speaking. Retirees come in
for courses in philosophy or art,
while young professionals line up for
"Test Yourself for Career Change."

The choices are diverse, and a
large number of the teachers are Rice
professors. "We are fortunate in hav-
ing a very high percentage of our
faculty work with us," Dean of OCS
and Special Programs Mary Mclntire
says. "We represent the university to
the community probably more than
any other group on campus. Continu-
ing Studies is a good showcase for
the university."

OCS serves a population that is
three times larger than Rice under-
graduate enrollment. "It can be hectic
at times," she acknowledges, "but
also very exciting."

Unlike other divisions of the uni-
versity, OCS is a difficult place to
plan five or ten years ahead. A de-
valuation of the peso translated into a
large decline of Mexican students in
the English-as-a-second-language
program. The loosening of restric-
tions in China a few years ago led to
a course called "Changing China,"
but the crackdown in the summer of
'89 prompted a new lecture on China

for a course titled "Critical Moments
in Modern History."

"We have to change gears very
rapidly in response to changes around
us," Mclntire says. Some programs
are offered repeatedly, especially in
the area of foreign languages, but in
the past three years a third of the
overall program changed. "We've
added 175 programs and courses in
three years, out of a total of 500," she
reports.

To stay on top of things, Mclntire
and her staff read extensively, listen
to faculty, survey people who take
OCS courses, and take suggestions
over the phone. They maintain an
"ongoing dialogue " about ideas for
new programs.

The field has grown nationwide in
recent years. "It used to be that con-
tinuing education was offered primar-
ily through universities and colleges,"
she says. "Now it's offered by seem-
ingly everybody — churches, high
schools, community centers, for-
profit businesses, some of which are
nationwide, professional associations,
and corporate in-house training pro-
grams. The number of providers has
grown considerably — but so has the
demand."

To succeed in the competitive
arena. Rice offers programs not of-
fered elsewhere. The intensive Rice
Publishing Program is one-of-a-kind
in the Southwest, and this summer
OCS began offering courses in writ-
ing and illustrating children's books.

Mclntire has been instrumental in
the phenomenal growth of Continuing
Studies since 1975, when she com-
pleted her Ph.D. in English at Rice.
At that time, Linda Driskill, who was
then the director of OCS, asked her to
develop a program on the U.S. bicen-
tennial. They came up with an inter-
disciplinary series of courses that
called upon the combined resources
of Rice faculty members.

"It was very, very hard work,"
Mclntire recalls. "I had one secretary,
and we were tucked away in the
library. I designed courses, enlisted
the speakers, wrote the brochure
copy, carried the slide projector, and
introduced the speakers. It was good
training."

The success of the bicentennial
course led to a series of "Living

Texas" seminars as the state was
experiencing a huge influx of North-
eastern and Midwestern people curious
about things Texan. Many OCS
courses today continue to take a mul-
tidisciplinary approach, and some call
upon the strengths of a range of
Houston organizations.

"We do a lot of programs with
other institutions, attempting to coor-
dinate our efforts," she says. OCS has
co-sponsored programs with the
Museum of Fine Arts, Houston Bal-
let, Houston Symphony, Alley Thea-
ter, Houston Grand Opera, and the
Society for the Performing Arts.

OCS is a cost-recovery unit, so
Mclntire must make sure enrollment
fees cover staff salaries and fringe
benefits, honoraria for faculty, main-
tenance and utilities, as well as adver-
tising to inform the public of new
programs. Program fees are reason-
able, with most eight-week evening
courses priced less than $100.

"I think all institutions of higher
education, including private ones,
have a responsibility to their commu-
nities," she says. "Ideally, continuing
studies should not only reflect but
should help to articulate the univer-
sity's mission to the larger commu-
nity. We are working very hard to
achieve that goal."

FINANCIAL
REPORT

1989

Report of Independent
Public Accountants

To the Board of Governors,
William Marsh Rice University:

We have audited the accompanying
balance sheet of William Marsh Rice
University (a nonprofit Texas corpo-
ration) as of June 30, 1989, and the
related statements of changes in fund
balances and current funds revenues,
expenditures and other changes for
the year then ended. These financial
statements are the responsibility of the
University's management. Our respon-
sibility is to express an opinion on
these financial statements based on
our audit.

We conducted our audit in accord-
ance with generally accepted auditing
standards. Those standards require that
we plan and perform the audit to obtain
reasonable assurance about whether the
financial statements are free of mate-
rial misstatement. An audit includes
examining, on a test basis, evidence
supporting the amounts and disclosures
in the financial statements. An audit
also includes assessing the accounting
principles used and significant esti-
mates made by management, as well
as evaluating the overall financial
statement presentation. We believe
that our audit provides a reasonable
basis for our opinion.

In our opinion, the financial state-
ments referred to above present fairly,
in all material respects, the financial
position of William Marsh Rice Uni-
versity as of June 30, 1989, and the
changes in its fund balances and cur-
rent funds revenues, expenditures and
other changes for the year then ended
in conformity with generally accepted
accounting principles. As explained
in Note 1, the annuity and life income
funds have been included in the basic
financial statements of the University,
whereas in prior years these amounts
were disclosed in the notes to the
financial statements.

M^^MAs ild^J^y^LCA. M_ (L&

ARTHUR ANDERSEN & CO.

Houston, Texas
October 5, 1989

Balance Sheet

June 30, 1989, with Comparative Totals at June 30, 1988 (Dollars in Thousands)

1989

1988

Annuity and

Current

Endowment and

life Income

Plant

Loan

Funds

Similar Funds

Funds

Combined

ASSETS

CASH, RECEIVABLES AND OTHER ASSETS:

Cash

$ 89

$ -

$ 2

$ -

$ 91

$ 589

Accounts receivable

2,476

25,567

543

—

28,664

20,091

Loans, net of allowance for doubtful accounts of $569

in 1989 and $530 in 1988

—

5,313

5,142

Other assets

1,985
4,550

131
25,698

—

5,313

2,116
36,184

1,761

545

27,583

INTERFUND RECEIVABLE (PAYABLE):

Interest-bearing endowment fund advances

(187)

9,943

—

(8,284)

(1,472)

—

Noninterest-bearing advances

23,712

23,525

288

(22,108)
(12,165)
665,657

—

(2,877)

(11,161)

3,390

183,707

$176,014

1,273

(199)

$5,131

—

INVESTMENTS (Notes 3 and 6)

40,752

710,104

183,707

$929,995

648,561

EDUCATIONAL PLANT (Note 5)

—

168,089

Total assets

$28,363

$679,190

$41,297

$844,233

LIABILITIES AND FUND BALANCES

LIABILITIES:

Accounts payable and accrued liabilities

$ 8,722

$ 13,232

$ 113

$ -

$ 22,067

$ 13,840

Annuity and life income payable

—

8,235
8,348

—

8,235
30,302

7,880

Total liabilities

8,722

13,232

—

21,720

COMMITMENTS AND CONTINGENCIES (Note 7)

FUND BALANCES:

U.S. Government and private grants refundable

—

3,527

3,177

Annuity and life income funds

—

32,949

—

32,949

28,159

University funds -

Unrestricted

4,305

—

4,305

Internally designated

6,359

—

6,359

3,846

Restricted

8,977

—

1,604

10,581

8,652

Income unrestricted endowment

—

314,714

—

314,714

286,708

Income restricted endowment

—

168,515

—

168,515

157,095

Unrestricted funds functioning os endowment

—

142,404

—

142,404

136,918

Restricted funds functioning as endowment

—

40,325

—

40,325

37,846

Unexpended plant funds

—

8,946

—

8,946

4,692

Net investment in plant

—

32,949

167,068
176,014

5,131

167,068
899,693

151,115

Total fund balances

19,641

665,958

822,513

Total liabilities and fund balances

$28,363

$679,190

$41,297

$176,014

$5,131

$929,995

$844,233

See notes to financial statements.

Statement of Changes in Fund Balances

For the year ended June 30, 1989, with Comparative Totals for 1988 (Dollars in Thousands)

1989

1988

REVENUES AND OTHER ADDITIONS:

Investment income (Notes 3 and 6)
Realized gains on investments (Note 3)
Gifts and bequests (Note 2)
Tuition ond fees
Grants and contracts

Unrestricted revenues of auxiliary enterprises
Additions to investment in plant -
Direct expenditures (including $8,726
charged to current funds expenditures in

Endowment and

Current Funds

Similar Funds

Annuity and
Life Income

Plant Funds

Loan

Internally

Functioning

Investment

Unrestricted

Designated

Restricted

Endowment

as Endowment

Funds

Unexpended

in Plant

Funds

Combined

$39,931

$ 194

$13,900

$ 3,607

$ 2,770

$ 134

$ 686

$ -

$ 99

$ 61,321

$ 55,836

—

28,725

13,235

2,559

—

44,616

109,094

2,646

—

4,647

6,629

—

2,879

4,997

205

—

22,003

17,881

18,664

2,871

—

21,535

19,076

4,717

—

18,463

—

23,180

21,074

15,596

460

—

16,056

14,303

Repayment of advances from endowment
funds
Interest on loans receivable
Other

Total revenues ond other additions

EXPENDITURES AND OTHER DEDUCTIONS:

Educational and general expenditures
Auxiliary enterprises expenditures
Expended for plant facilities
Repayment of advances from endowment funds
Interest on endowment fund advances
Amortization of auxiliary ond educational

service facilities
Retirement of plant assets
Loan cancellations and collection costs
Refunded to grantors

Total expenditures and other deductions

TRANSFERS AMONG FUNDS -
ADDITIONS (DEDUCTIONS):

Mandatory-
Loan fund matching grants
Undesignated gifts (Note 2)
Provision for plant improvements (Note 5)

Funding of unrestricted current expenditures
for equipment

Funding of principal and interest payments
for plant additions

Matured annuity and life income funds

Other voluntary transfers, net

Total transfers
NET INCREASE FOR THE YEAR
FUND BALANCE AT BEGINNING OF YEAR
FUND BALANCE AT END OF YEAR

See notes to financial statements.

404

81,958

60,744
17,346

78,(

(58)
(3,929)

4,629

1,473
4,998

4,429
704

5,133

37,228

35,043
524

38,961

16,005

7,327

5,572

35,579

7,327

(22)
3,929
(4,629)

—

19,087

—

19,087

12,433

335

323

—

247

239

400

—

204
550

2,699
211,079

2,048

6,180

19,627

252,307

100,216

90,338

—

18,574

17,430

3,034

—

10,361

6,809

335

—

335

323

356

—

139

495

612

497

323

—

3,177

—

3,177

2,995

—

232

266

—

371

12
133,899

3,725

3,674

119,106

(691)
(3,819)

2,648

2,513
3,846

$6,359

429

2,078
6,899

$ 8,977

782
(375)

465

39,426
443,803

$483,229

(713)

7,965

174,764

$182,729

(782)

4,790
28,159

$32,949

691

1,108
1,799
4,254
4,692

$ 8,946

—

201
4,930

$5,131

(3,868)

—

77,180
822,513

$899,693

—

4,305
$ 4,305

15,953
151,115

$167,068

133,201
689,312

$822,513

Statement of Current Funds Revenues, Expenditures and Other Changes

For the year ended June 30, 1989, with Comparative Totals for 1988 (Dollars in Thousands)

1989

REVENUES:

Educational and general -

Endowment income (Notes 3 and 6)
Tuition and fees

Government grants and contracts
Private grants and contracts
Gifts and bequests (Note 2)
Departmental sales and services
Other sources

Total educational and general
Auxiliary enterprises

Total revenues

EXPENDITURES:

Educational and general -
Instruction and departmental research
Sponsored research
Other sponsored programs
Library

Scholarships and fellowships
Student services

Operation and maintenance of plant
General administration
Institutional development

Total educational and general
Auxiliary enterprises

Total expenditures

TRANSFERS AND ADDITIONS (DEDUCTIONS):

Mandatory transfers -

Undesignated gifts (Note 2)

Provision for plant improvements (Note 5)
Voluntary transfers, net
Other additions (deductions) -

Amount of restricted receipts over transfers to revenues

Refunded to grantors

Net transfers and additions (deductions)
Net increase in fund balances
See notes to financial statements.

1988

Internally

Unrestricted

Designated

Restricted

Combined

$39,931

$ 194

$13,900

$ 54,025

$46,903

18,664

2,871

—

21,535

19,076

3,822

—

14,021

17,843

15,223

895

—

4,442

5,337

5,146

2,646

—

2,557

5,203

4,775

340

1,419

122

1,881

1,568

54
4,538

119
105,943

156

66,362

35,043

92,847

15,596

460

524

16,580

14,849

81,958

4,998

35,567

122,523

107,696

25,955

3,523

13,241

42,719

38,231

—

17,037

14,830

—

1,115

1,033

4,304

546

309

5,159

4,377

7,788

2,720

10,509

10,081

2,616

163

2,812

2,420

9,353

—

526

9,879

9,363

8,095

179

8,314

7,514

2,633

2,672

2,489

60,744

4,429

35,043

100,216

90,338

17,346

704

524

18,571

17,430

78,090

5,133

35,567

118,790

107,768

(58)

(118)

(3,929)

—

(3,929)

(3,501)

119

2,648

429

3,196

4,052

—

1,661

1,555

—

(12)

(10)

(3,868)

2,648

2,078

858

1,978

$2,513

$ 2,078

$ 4,591

$ 1,906

Notes to Financial Statements

JUNE 30, 1989

(7; Summary of significant accounting

policies-
Basis of accounting-

The financial statements of William Marsh
Rice University (the University) have been
prepared in accordance with generally accepted
accounting principles for colleges and univer-
sities. Accordingly, the accompanying financial
statements have been prepared on the accrual
basis of accounting, except for depreciation of
educational plant facilities, as explained below.
Limitations and restrictions placed on the use of
available resources are recognized in the accom-
panying financial statements through the use of
fund accounting. Fund accounting is a procedure
by which resources are classified for accounting
and reporting purposes into separate funds in
accordance with specified objectives or ac-
tivities. Funds having similar characteristics
together with all related financial transactions
have been combined into fund groups in the
accompanying financial statements. The annuity
and life income funds have been included in
the basic financial statements of the University,
whereas in prior years these amounts were
disclosed in the notes to the financial state-
ments (see the annuity and life income funds
section below).

The financial information shown for 1988 in
the accompanying financial statements is in-
cluded to provide a basis for comparison with
1989 and presents summarized totals only.
Certain of the 1988 financial information has
been reclassified to conform with current year
presentation.

Current funds-

The statement of current funds revenues,
expenditures and other changes is a statement
of financial activities of current funds related to
the current reporting period. It does not purport
to present the net income or loss for the period
as would a statement of income or a statement
of revenues and expenses.

The unrestricted current fund is used to
account for those transactions related to the
University's operating budget as approved by
the board of governors and for certain resources
which have been designated for specific pur-
poses by the University's administration. These
latter items are presented under the internally
designated caption. With the exception of the
internally designated fund balance, it is the
policy of the board of governors to transfer any
net increase in the unrestricted current fund
balance for the year to unrestricted funds
functioning as endowment.

The restricted current fund is used to account
for funds expended for current operations but

restricted by donors or other external sources for
specific purposes. In the statement of current
funds revenues, expenditures and other changes,
restricted current fund receipts are reported as
revenues when expended.

Current funds used to purchase equipment
are accounted for as expenditures of the current
funds. Equipment expenditures of the unre-
stricted current fund are funded by a transfer
from that portion of unrestricted funds function-
ing as endowment described in Note 5.

Endowment and similar funds-
Endowment funds are generally subject to
the restrictions of gift instruments requiring that
the principal be invested and only the income
be expended. Gains and losses arising from the
disposition of the investments are accounted for
as changes in principal. Endowment funds are
either income restricted or income unrestricted
as stipulated by the donor. Investment income
from income restricted endowments may be
expended only for the purpose specified by the
donor; unrestricted endowment income may be
expended for any purpose approved by the board
of governors.

The board of governors has designated certain
restricted and unrestricted funds to function as
endowment funds. Restricted funds functioning
as endowment are comprised of (a) restricted
current gifts transferred to this fund by the board
of governors and (b) any excess of restricted
investment income over current expenditures.
The principal of these funds may be expended,
but only in accordance with the original specifi-
cations of the donor. Investment income from
these funds is also subject to the same restric-
tions as the original gifts. The principal of
unrestricted funds functioning as endowment
is spendable at the discretion of the board of
governors.

Generally, income from unrestricted endow-
ment and similar funds is reported as revenue
of the unrestricted current fund, and income
from restricted endowment and similar funds
is reported in the fund to which it is restricted.
However, investment income from developed
real estate and oil and gas properties equal to
amortization of the properties is retained in
the endowment funds for the purpose of asset
recovery. Also, 27!/:% ($1,011,000 for 1989) of
the net receipts from oil and gas royalties are
retained in the income unrestricted endowment
fund after the related properties are fully
amortized. In addition, income from restricted
funds supporting educational chairs in excess
of current-year expenditures is also retained
in the endowment funds.

Annuity and life income funds-
Annuity and life income funds arise from gifts
which are subject to the requirement that the
University or its subsidiary act as trustee for the
donated assets and periodically pay specified
amounts to the designated beneficiaries. Gener-
ally, beneficiary payments are fixed for annuity
funds and based on the income earned on the
donated assets for life income funds. At a

specified time in the agreements, usually upon
the deaths of the beneficiaries, the ownership of
the donated assets will transfer to the University
and the beneficiary payments will cease. An-
nuity funds also include gift annuities which
arise from gifts for which the University takes
ownership of the assets at the date of gift with an
obligation to periodically pay specified amounts
to designated beneficiaries. Annuity and life
income payable includes the discounted annuity
obligation and undistributed life income fund
earnings.

The annuity and life income funds have been
included in the basic financial statements of the
University, whereas in prior years these amounts
were disclosed in the notes to the financial state-
ments. The effect of combining annuity and life
income funds in the University's financial state-
ments was to increase combined fund balances
at June 30, 1989, by $27,687,000, excluding
the effect of gift annuities which were reclassi-
fied from endowment to annuity and life income
funds. Also, the 1988 combined financial state-
ments have been restated to reflect the inclusion
of annuity and life income funds and the reclassi-
fication of gift annuities.

Plant funds-
Plant funds consist of amounts in the educa-
tional plant together with unexpended gifts,
grants, income and administratively designated
funds which are held for acquisition, replace-
ment or construction of physical properties.
The educational plant is stated at cost for pur-
chased assets and fair market value at the date
of donation in the case of gifts. Auxiliary and
educational service facilities financed with ad-
vances from endowment funds are depreciated
over their estimated useful lives. Although no
other educational plant assets are depreciated,
it is the University's policy to retire capitalized
equipment at the rate of 6Vi% per year.

Certain capital projects and major maintenance
projects for auxiliary enterprises are funded with
interest-bearing advances from unrestricted
funds functioning as endowment. The advances
for capital and major maintenance projects
bear interest ranging primarily from 4% to 11%.
In September 1988. the Financial Accounting
Standards Board released Statement of Financial
Accounting Standards No. 99 (Deferral of the
Effective Date of Recognition of Depreciation
by Not-for-Profit Organizations). The statement,
which is required to be adopted not later than
fiscal year 1991, requires all not-for-profit organi-
zations to recognize the cost of utilizing long-
lived tangible assets. The University is currently
evaluating the impact of this statement and
intends to adopt the statement no later than 1991.

Loan funds-
Loan funds include (a) gifts and grants which
are limited by donors for the purpose of making
loans to students or faculty, (b) federal student
loan programs financed primarily by the federal
government and administered by the University
and (c) advances to the loan funds from unre-
stricted funds functioning as endowment. The
interest received on student loans financed by
advances from unrestricted funds functioning as
endowment is repaid to the endowment funds.

(2) Gifts and bequests-
It is the policy of the University to include
gifts as revenues or additions to the appropriate
fund balances only when received. Gifts and
bequests without any designated obligatory use
are required to be added to endowment, accord-
ing to a legal interpretation of the University's
charter. These gifts are recorded as revenues of
the unrestricted current fund and as mandatory
transfers to the endowment and similar funds.
Pledges outstanding at June 30, 1989 which
will be recorded as revenues upon receipt of the
gifts, are as follows:

The following tabulation summarizes investment performance (excluding unrealized gains
from market appreciation) for the year ended June 30, 1989:

Current funds-
Unrestricted
Restricted

S 4,000
2,225,000

Total current funds
Endowment funds
Plant funds

2,229,000
4,068,000
9,293,000

Total pledges

$15,590,000

(3) Investments-

Investments are recorded at cost at date of
acquisition or fair market value at date of dona-
tion in the case of gifts, except for investments in
wholly owned corporations which are accounted
for in the endowment funds under the equity
method. Property taxes and maintenance costs
on undeveloped real estate interests in the un-
restricted endowment have been capitalized
(accumulated costs of approximately $2,71 1 ,000
at June 30, 1989).

Most income restricted endowment funds,
restricted funds functioning as endowment and
some unrestricted funds functioning as endow-
ment participate in two common investment
pools which are operated on a market value
basis. Those income restricted funds, which by
the terms of the gifts may not participate in such
pools, are maintained on a separate investment
basis. Other endowment funds are commingled
for investment purposes in the general investment
pool for unrestricted funds. Investments are
made within established guidelines authorized
by the board of governors.

Investments at June 30, 1989 and 1988, are as
follows:

June 30

1989

1988

Marketable securities
($927,691,000 and
$809,616,000 market
value, respectively

Developed real estate
Undeveloped real estate
Mortgage loons
Wholly owned corporations,

ot underlying equity
Oil and gas properties

(net of accumulated

amortization of

$26,475,000 and

$26,410,000,

respectively)

$674,827,000 $615,524,(

17,968,000 17,1 91, (

8,497,000 6,657,(

6,086,000 6,738,(

1,171,1

,215,(

Realized Gains

Investment Income

(Losses)

, Net

Annuity

Endowment

and Life

Endowment

Current

and Similar

Income

Other

and Similar

Other

Funds

Marketable securities

$49,451,000

$2,677,000

$167,000

$785,000

$42,127,000

$2,656,000

Wholly owned corporations

394,000

2,600,000

—

Oil and gos properties

2,896,000

1,011,000

—

Other investments

1,460,000

89,000

(33,000)

(167,000)

—

$54,201,000

$6,377,000

$134,000

$785,000

$41,960,000

$2,656,000

The above tabulation includes approximately $176,000 investment income earned by auxiliary
enterprise investments.

(4) Retirement plans-

Substantially all employees are eligible to
participate in a defined contribution retirement
plan which is administered by an outside agency.
The contributions of the University and the plan
participants, who are fully vested, are applied to
individual annuities issued to each participant.
The University's contributions to the plan of
$3,520,000 in 1989 were recorded as expendi-
tures of the unrestricted current fund.

The University also had a defined benefit
retirement plan administered by the same out-
side agency covering participants who began
receiving retirement benefits prior to July 1,
1976. and certain other employees. On May 26.
1988, the board of governors approved the ter-
mination of the defined benefit retirement plan.
As of April 1 . 1989, guaranteed annuity benefits
were purchased for all retired participants and
the vested benefits for the remainder of the
participants were combined with the existing
defined contribution plan using substantially all
of the net assets of the terminated plan .

(5) Educational plant-
Property and equipment of the educational

plant at June 30, 1989, are as follows:

Land

Buildings and improvements
Equipment, furniture and library books
Construction in progress
Less- Allowance for amortizotion of auxiliary
and educotionol service facilities

$ 9,507,000

113,508,000

67,348,000

4,259,000

(10,915,000)

$183,707,0

As a provision for plant improvements, a trans-
fer equal to approximately 1 0% of unrestricted
endowment income has been made from unre-
stricted current funds to unrestricted funds func-
tioning as endowment. The provision for these
improvements is $4,015,000 at June 30, 1989.

(6) Collateral for loaned securities-

The University participates in a securities
lending program administered by a broker using
securities held in custody by the University's
custodial bank. All loaned securities are col-
lateralized with letters of credit held by the
custodial bank equal to or greater than 102%
of the daily market value of the securities. As
of June 30, 1989. securities with a market value
of $89,710,000 were loaned through this pro-
gram. Investment income includes approximately
$686,000 earned from securities loaned during
fiscal 1989.

(7) Commitments and contingencies-
There are several suits and claims pending

against the University, the effect of which cannot
be estimated at this time; however, officials of
the University and legal counsel believe that the
ultimate liability, if any, will not be material to
the University's financial position.

The University was commited under contracts
at June 30, 1989, for capital improvements and
major maintenance of approximately $3 , 1 50,000
to be financed primarily from funds function-
ing as endowment and gifts. Commitments of
$1,314,000 in the unrestricted current funds and
$757,000 in the restricted current fund were also
outstanding at June 30, 1989.

The fund balance of unrestricted funds func-
tioning as endowment includes a $5,000,000
provision for contingencies at June 30, 1989.
If funds are expended from this balance, it is
replenished by transfers of unrestricted en-
dowment income to maintain the balance at
$5,000,000. No transfers were necessary during
fiscal 1989.

1,555,(

I.236.C

$710,104,000 $648,561,1

Rice University
Board of Governors

December 1. 1989

Trustees

Charles W. Duncan, Jr.

Chair of Rice Board of

Governors

Chairman of the Board

Duncan, Cook & Company

Josephine E. Abercrombie
Vice Chair of Rice Board of
Governors
Director, Josephine
Abercrombie Interests

D. Kent Anderson

Chairman and CEO

First Interstate Bank of Texas

J. Evans Attwell

Attorney. Managing Partner

Vinson & Elkins

John L. Cox
Independent Oil Operator

Burton J. McMurtry
Partner, Technology Venture
Investors

Jack T. Trotter
Investments

Term Members

J. D. Bucky Allshouse
Attorney-at-Law

Stephen C. Cook

President

Duncan. Cook & Company

James A. Elkins III

Senior Vice President

First City Texas-Houston. N.A.

./. Thomas Eubank

Partner

Baker & Botts

James W. Glanville

Senior Partner

Lazard Freres & Company

William P. Hobby

Lt. Governor
State of Texas

Louisa Stude Sarofim

Thomas D. Smith
Former President
Mega Construction Company

Alumni Governors

Carolyn Douglas Devine

Joyce Pounds Hardy
Teacher, Writer

Albert N. Kidd

Strategic Planning Coordinator

Exxon Company International

Paula Meredith Mosle

Trustees Emeriti

Herbert Allen
Director and Consultant
Cameron Iron Works

E. D. Butcher
President (Retired)
American Commercial Lines,
Incorporated

Harry J. Chavanne
Banker & Investor
Chavanne Enterprises

Oveta Culp Hobby

(Mrs. William P.)"

Chairman of the Executive

Committee

H & C Communications. Inc.

C. M. Hudspeth

of Counsel

DeLange. Hudspeth & Pitman

Edward W. Kelley, Jr.
Federal Reserve Board

H. Malcolm Lovett

Partner

Baker & Botts

Ralph S. O'Connor

Principal

Ralph O'Connor & Associates

James U. Teague
Retired

Governor Advisors

Judy Ley Allen
Investments

Richard A . Chapman
TI Research Fellow
Texas Instruments. Inc.

Thomas H. Cruikshank
President
Halliburton Company

William S. Farish III

President

W. S. Farish & Co.

Catherine C. Hannah

James W. Hargrove
Financial Consultant

Gerald D. Hines

President

Gerald D. Hines Interests

Paul N. Howell
Chairman of the Board
Howell Corporation

Carl I/lig
Attomey-at-Law

Jack S. Josey

President

Lenoir M. Josey, Inc.

Howard B. Keck

Chairman of the Board (Retired)

Superior Oil Company

Baine P. Kerr
Chairman of Executive
Committee
Pennzoil Company

William F. Kieschnick
President & Chief Executive
Officer (Retired)
ARCO

Neal T. Lacey
Architect

WendelD.Ley
Investments

/. Hugh Liedtke
Chairman of the Boacd
Pennzoil Company

William M. McCardell
President (Retired)
Exxon Minerals Corp.

Jeny McCleskey

Director of Planning

Chemicals & Pigment

Department

E. I. DuPont de Nemours &

Company

J. W. McLean

President

The Liberty National Bank &

Trust Company

James R. Meyers

Judge of the 126th District Court

(Retired)

George R. Miner

President

Miner-Dederick Companies

Pat H. Moore

President

Martin Moore, Inc.

S. /. Morris

Architect

Cannady, Jackson & Ryan

Walter D. Murphy
Senior Vice President
HCB Contractors

Ralph W. Noble II
President (Retired)
Milchem, Inc.

Haylett O'Neill. Jr.
Exxon (Retired)

M. Kenneth Oshman
President and CEO
Echelon

J. Howard Rambin

Chairman of the Board (Retired)

Texaco. Inc.

David L. Rooke
Executive Vice President
Dow Chemical Company

Frank B. Rxan
CEO

Contex Electronics. Inc.

Hany K. Smith
Chairman of the Board
Smith Development Corp.

Louis D. Spaw. Jr.
Chairman of the Board
Spaw-Glass Construction, Inc.

Karl C. ten Brink
General Manager (Retired)
Texaco. Inc.

James O. Winston. Jr.

Former Director

Rowles. Winston Company

Benjamin N. Woodson
Chairman of the Board (Retired)
American General Companies

Helen S. Warden

RICE

Rice University
P.O.Box 1892
Houston, Texas 77251